Hospitality and Tourism Market

Explore the current business operation of Mercure Sydney, a popular hotel in Australia, and learn about their unique in-room facilities, distribution strategy, pricing strategy, target market, and branding. Get recommendations for future campaigns and innovative ideas.

Running head: HOSPITALITY MARKET
Hospitality and Tourism Market
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Table of Contents
Introduction of the business.............................................................................................................3
Current business operation..............................................................................................................3
Recommendation for future campaign............................................................................................8
Recommendations for the new or innovative idea..........................................................................9
References......................................................................................................................................10
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Introduction of the business
Hospitality or tourism sector contributes more in the economy of a country. In Australia
the tourism industry is responsible to generate high revenue, which facilitates the growth of the
country (Ruhanen et al. 2015). Mercure Sydney is an eminent hotel in Australia. However,
Sydney is the major tourist attraction in Australia. Therefore, this is the core business sector of
Australia as a result many foreign visitors come to this place regularly. Mercure Sydney includes
517 rooms. The convenient location of Mercure Sydney is the major attraction of the visitors.
Such convenient location makes this hotel an ideal choice for the customers while they are
travelling for leisure or business (Mercuresydney.com.au 2018). This hotel is near to the Darling
Harbor, which is another tourist attraction of Sydney. Such location makes this hotel popular.
Mercure Sydney is famous for its room facilities. They provide unique in-room facilities based
on the travelling needs of the customers. This hotel follows multilingual standard operating
process in their organization. They have created a professional standard operating system. Their
operating strategies include reduction of mistake, increase the productivity, develop strong brand
recognition and lower the employee turnover.
Current business operation
Mercure Sydney is popular for their unique in-room facilities. They provide En-suite
bathrooms, in-room safety, satellite TV and free Wi-Fi connection. However, recently they offer
aromatic baths in the room, which is a unique in-room facility of this hotel. Such aromatic baths
allow the customers to release their stress and to get refreshment. This new service is helpful for
their business to increase the number of customers and improve the brand image. Next element
of the business operation is the location. Mercure Sydney is situated in Sydney, which the most
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popular place in Australia. Such place is the core business location and major tourist attraction in
Australia. Hence, the location is a great advantage of this hotel to gain both local and foreign
customers. In order to maximize the customer number and to enhance the profit margin the
hospitality industry needs to carry out a proper distribution strategy (Lee et al. 2017). Mercure
Sydney focuses on the direct booking strategy as a part of the distribution strategy. They use
mobile optimized booking system. This enables such organization to ensure that they are not
losing their booking due to the poor user experience. Therefore, their distribution strategy
includes a diverse range of channels. They focus on both online and offline channels to promote
their brand to the greatest number of customers in the world.
Pricing strategy is crucial for every business as based on this the growth of a business
can be increased or decreased (Chen et al. 2016). Mercure Sydney follows economy pricing
model. However, the large business organizations follow this pricing strategy. This pricing
strategy enables Mercure Sydney to attract the customers who are price conscious. By using this
strategy they can minimize the production and marketing cost to lower the product price. In the
hospitality industry the customer segmentation include lower yield segment and higher yield
segment (Wu et al. 2017). However, the lower yield segment derives from the wholesaler. These
customers book the room early and have a tendency to book the room throughout the year. On
the other hand, higher yield segment books the room shortly before they arrive and they often
provide high price for the service as they have limited time to book the room. Apart from this
Mercure Hotel focuses on the young and middle age groups as their target customers. People of
these groups may be the tourists or business clients. Hence, the position of Mercure Hotel can be
identified by positioning map strategy. Based on the positioning map analysis it has been found
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that Mercure Sydney is present in the first quadrant of the positioning map as it provides high
quality service at low price (Gale 2016).
Branding is another vital part of the business operation. Mercure Sydney has developed
a co-branding strategy. Co-branding helps the business organization to incorporate other brands
in their marketing strategy without losing their own brand name (Ben Aissa and Goaied 2016).
This enables such organization to tie up with the fashion companies as it helps them to provide
fashionable products to the guests as an in-room facility. On the other hand, they have
implemented online advertising process via social media and company website to promote their
business. Such social media application is helpful for them to promote their business in a large
consumer domain. They follow digital marketing strategy by making a user-friendly website.
This allows the customers to access their service easily from different locations. This maximizes
their revenue.
Figure 1: Mercure Sydney Hotel
(Source: Mercuresydney.com.au 2018)
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Figure 2: In-room facilities
(Source: Mercuresydney.com.au 2018)
Figure 3: Location of Mercure Sydney
(Source: Mercuresydney.com.au 2018)
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Figure 3: Booking process of Mercure Sydney
(Source: Mercuresydney.com.au 2018)
Figure 4: Market segmentation and target market
(Source: Ben Aissa and Goaied 2016)
Figure 5: Promotion of Mercure brand via social media
(Source: facebook.com)
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High quality
Low Quality
High PriceLow Price
Sebel TownhouseCitadines
Park HyattMercure Sydney
Figure 6: Positioning Map analysis in the context of Mercure Hotel
(Source: Gale 2016)
Recommendation for future campaign
In order to develop a business in different market segments, it is crucial for Mercure
Sydney to carry out an integrated marketing campaign. They need to use both traditional and
digital media to strengthen their brand image. They can use newspaper, magazine, and brochure
as the traditional media. However, the content should be attractive in these media, which will
attract the middle-aged customers (Luxton et al. 2015). Therefore, the digital media include
social media, email marketing, and website advertising. By sharing the service information via
facebook Mercure will be able to cover customers from different geographical regions as all ages
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people use social media in the recent years. Especially young customers will be able to know
about their service via social media. However, the blog content should include in-depth
information about the service and the websites need to design in an attractive way, which can
gain the customer attention.
Recommendations for the new or innovative idea
The service quality and advertising technique are good in Mercure Travel. They need to
incorporate a new idea into their process improvement. However, by adapting a new distribution
strategy will be effective for this hotel to increase their customer number. Use of commission-
free booking system via online will be helpful to improve the OTA'S distribution process in this
organization. Often the customers have to pay booking commission while they are booking via
OTA. Mercure Sydney needs to implement commission free booking engine, which will allow
the customers to avoid any extra booking charges during their booking. Therefore, by providing
the targeted discount to the social media followers, customer loyalty member and email
subscriber this organization will be able to double their customers.
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References
Ben Aissa, S. and Goaied, M., 2016. Determinants of tourism hotel market efficiency.
International Journal of Culture, Tourism and Hospitality Research, 10(2), pp.173-190.
Chen, C.M., Lin, Y.C., Chi, Y.P. and Wu, S.C., 2016. Do competitive strategy effects vary
across hotel industry cycles?. International Journal of Hospitality Management, 54, pp.104-106.
Gale, T., 2016. Tourism, local community and natural resources: tourism impact assessment and
tourism management analysis in the Jiuzhaigou Biosphere Reserve, China. In Ecotourism and
Environmental Sustainability (pp. 91-106). Routledge.
Lee, S., Oh, H. and Hsu, C.H., 2017. Country-of-operation and brand images: evidence from the
Chinese hotel industry. International Journal of Contemporary Hospitality Management, 29(7),
pp.1814-1833.
Luxton, S., Reid, M. and Mavondo, F., 2015. Integrated marketing communication capability
and brand performance. Journal of Advertising, 44(1), pp.37-46.
Mercuresydney.com.au. (2018). Mercure Sydney. [online] Available at:
http://www.mercuresydney.com.au/ [Accessed 10 Jun. 2018].
Ruhanen, L., Whitford, M. and McLennan, C.L., 2015. Indigenous tourism in Australia: Time
for a reality check. Tourism Management, 48, pp.73-83.
Wu, D.C., Song, H. and Shen, S., 2017. New developments in tourism and hotel demand
modeling and forecasting. International Journal of Contemporary Hospitality Management,
29(1), pp.507-529.
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